Johnson Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2020.

1. Sales: Quarter 1, 28,600 bags; quarter 2, 42,600 bags. Selling price is $62 per bag.

2. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarr at $1.50 per pound.

3. Desired inventory levels:

Type of Inventory January 1 April 1 July 1

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Snare (Bags) 8,100 12,400 18,500

Gumm (pounds) 9,100 10,300 13,200

Tarr (pounds) 14,300 20,300 25,500

4. Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour

5. Selling and administrative expenses are expected to be 15% of sales plus $177,000 per quarter.

6. Interest expense is $100,000

7. Income taxes are expected to be 30% of income before income taxes.

Your assistant has prepared two budgets: (1) the manufacturing overhead budget shows expected costs to be 125% of direct labor cost, and (2) the direct materials budget for Tarr shows the cost of Tarr purchases to be $299,000 in quarter 1 and $425,500 in quarter 2.

(Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)

-Prepare the Sales budget. It has to show numbers for Quarter 1 and Quarter 2 as well as for 6 months

-Prepare the production budget it has to show numbers for Quarter 1 and Quarter 2 as well as for 6 months

-Prepare the direct materials budget while showing numbers for Quarter 1 and Quarter 2 and for 6 months

-Prepare the direct labor budget while showing numbers for Quarter 1 and Quarter 2 and for 6 months

-Prepare the selling and administrative expense budget while showing numbers for Quarter 1 and Quarter 2 and for 6 months

-Prepare the budgeted multiple-step income statement for the first 6 months